Tri-Cities housing market flexes its equity muscles, Sullivan Co. tops equity rich homes count


By DON FENLEY

Q4 equity richThe Tri-Cities housing market flexed a little muscle in RealtyTrac’s Q4 Home Equity and Underwater Report released today.

According to the report 20% of all the homes nationwide with mortgages included in the report are equity rich. That means the homeowner has 50% or more equity. All six of the local counties included in the report had higher percentages than 20%. Sullivan County was at the top of the equity rich list with 37%.

According to the report, there were 28,819 Tri-Cities properties with mortgages in the equity rich class in Q4.

q4 emerging“Median home prices nationwide bottomed out in March 2012 and since then have increased 35 percent, lifting 5.8 million homeowners out of seriously underwater territory,” said Daren Blomquist, vice president at RealtyTrac. “While the remaining seriously underwater properties continue to be a millstone around the neck of some local markets, the growing number of equity rich homeowners should help counteract the downward pull of negative equity in many markets, empowering those housing markets — and by extension their local economies — to walk on water in 2015.”

q4 seriously underwaterA total of 15,623 local properties are in the class of equity resurfacing.

Homes in the resurfacing class ranged from 20% in Washington Co. TN to 12% in Bristol, VA.

RealtyTrac defines resurfacing homes with mortgages that have between 10% negative equity and 10% positive equity

The final equity class is seriously underwater. That’s the one that gets top play. Locally it includes 8,233 properties in the seven Tri-Cities counties included in the report.

From a national perspective, at the end of the year there were 7,052,570 U.S. residential properties seriously underwater — where the combined loan amount secured by the property is at least 25 percent higher than the property’s estimated market value — representing 13 percent of all properties with a mortgage.

The number and share of seriously underwater homeowners at the end of the fourth quarter of 2014 were both at their lowest levels since RealtyTrac began tracking home equity trends in the first quarter of 2012.

There was only one local county that exceeded the 13% national benchmark.  According to the report, 19% of the homes with mortgages in Washington Co. VA were seriously underwater in Q4. Six of the nine local counties in the study were in double digits.

The local and national share of distressed properties — those in some stage of foreclosure — with positive equity surpassed the share of distressed properties that were seriously underwater in Q4 for the first time since RealtyTrac began tracking those metrics a year ago. At the end of the fourth quarter, 42 percent of distressed properties had some positive equity compared to 31 percent a year ago.

Here what a drill down on local distressed properties with equity looked like in Q4:

  • Carter – 86% – none were seriously underwater.
  • Greene – 75% – 25% of them were seriously underwater.
  • Hawkins – 64% – 9% are seriously underwater.
  • Johnson – 100% – none are seriously underwater.
  • Sullivan – 90% – none are seriously underwater.
  • Unicoi – 40% – none are seriously underwater.
  • Washington Co. TN – 65% – 13% are seriously underwater.

Homeowners who have positive equity have options before they face foreclosure.

According to the report, the percentage of loans seriously underwater were higher for loans originated during the housing bubble years of 2004 to 2008, with 36 percent of all loans originated in 2006 seriously underwater — the most of any loan vintage, followed by 2007 (32 percent), 2005 (28 percent), 2008 (22 percent), and 2004 (19 percent).

The RealtyTrac U.S. Home Equity and Underwater report counts  residential properties based on several categories of equity — or loan to value (LTV) — at the state, metro and county level, along with the percentage of total residential properties with a mortgage that each equity category represents. The equity/LTV calculation is derived from a combination of record-level open loan data and record-level estimated property value data, and is also matched against record-level foreclosure data to determine foreclosure status for each equity/LTV category.

Definitions

Seriously underwater: Loan to value ratio of 125 percent or above, meaning the homeowner owed at least 25 percent more than the estimated market value of the property.

Equity rich: Loan to value ratio of 50 percent or lower, meaning the homeowner had at least 50 percent equity.

Foreclosures w/equity: Properties in some stage of the foreclosure process (default or scheduled for auction, not including bank-owned) where the loan to value ratio was 100 percent or lower.

RealtyTrac’s full Q4 U.S. Home Equity and Underwater Report can be accessed at: http://www.realtytrac.com/news/mortgage-and-finance/year-end-2014-underwater-home-equity-report/

 

 

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